The Ukrainian parliament has approved the budget resolution for 2011.

It is planned that the budget deficit in 2011 will not exceed 4.5% of GDP. The share of GDP redistribution through the consolidated budget will not exceed 30.5%. However, the amount of public debt will be kept at a cost-safe level, not more than 40% of GDP.

It is also planned to provide Cabinet guarantees for investment and innovative projects aimed at developing the export potential of the national economy, in the volume not exceeding 3% of GDP.

The resolution provides for holding tax reform which includes phased reduction of tax burden on taxpayers and introduction of additional taxation of income of citizens with high incomes, in particular by introducing a tax on luxury.

The resolution also envisage the introduction of a single payment for subsoil use for mining instead of the existing two payments, balancing the financial plans of Naftogaz and its subsidiaries without attraction of budgetary funds, government securities, providing installments and delays in the payment of tax liabilities.

It is planned to reduce the deficit of the Pension Fund and improve social standards.

The Cabinet must submit for approval of the Verkhovna Rada the draft budget for next year before September 15, 2010.


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